Tax Competition and Harmonisation under EU Law: Economic Realities and Legal Rules

This article is a legal analysis of jurisdictional corporate tax competition under the objectives of EU law. It compares the legal foundations for tax competition, on one hand, and tax harmonisation, on the other. This is accomplished through three constituent analyses. Part 1 conducts an analysis of the economic principles underlying tax competition as they apply to the criteria of EU law and tax policy. Part 2 examines the position of tax competition under EU law by reference to national anti-avoidance legislation. Part 3 examines the position of tax harmonisation under EU law by reference to the proposed Common Consolidated Corporate Tax Base. By proceeding through these three analyses, this study concludes that jurisdictional tax competition has fundamental legal founding in the objectives of the Treaty. Tax competition is more than a mere relic of Member State competence-it is an economic imperative recognised and protected under EU law.